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Maybe money does buy happiness (according to this study)

By: Malcolm Wheatley | April 11, 2020

Does money buy happiness? When we were growing up, most of us were taught that the answer was ‘no’. As adults, our view might have become more nuanced: certainly, not having any money — or not having enough money — can be pretty miserable.

So does money buy happiness? A new study, published in America’s prestigious journal Proceedings of the National Academy of Sciences, sheds new light on the question.

It’s long been known that altruism — kind, caring and generous behaviour towards others — buys happiness. Helping other people, volunteering, supporting charities: many of us do, and feel good about it.

And we don’t just feel good about it. Research has shown benefits such as lower blood pressure and improved heart health. What’s more, the experience of giving can make us less sensitive to pain.

Does money buy happiness? Yes, in the short term

The study in question compared two groups of German university students. The students answered questions about how happy they were, and were then given the choice of two lotteries to enter.

In the first lottery, they stood a chance of being given €100. If they chose the second lottery, they wouldn’t get any money for themselves, but they might trigger a donation of €350 that could save a life of someone with tuberculosis.

Tuberculosis is a deadly infectious disease. Long since mostly eradicated in the West, it’s still prevalent in countries like India, Pakistan, Nigeria, and Indonesia.

The lotteries — and the payments — were real. In all, students in the first lottery received over €40,000 and students in the second lottery donated €111,300 to an Indian charity fighting tuberculosis.

So plenty of students — about 60% — chose to help others, and save lives. And when surveyed, most of them felt good about themselves, and happy.

Does money buy happiness? For these students, the answer appeared to be ‘yes’.

And if you’ve just been cured of tuberculosis — from which 1.5m people died in 2018, according to the World Health Organization — then asking ‘Does money buy happiness?’ seems pretty superfluous. You’re presumably very happy to be alive.

Does money buy happiness? Yes, but it wears off

A month later, though, things had changed. The students who had donated the money were no longer as happy. In fact, they were less happy than the students who had decided to receive €100 and keep it.

Happiest of all, though, were those who opted to donate the money, but weren’t successful in the lottery. Some of these students were later randomly selected to be given €100 as a ‘thank you’.

Meaning that they got all the buzz from choosing to be altruistic — but also got to keep €100 as well.

Does money buy happiness? €100 seemed to do the trick for these students, for sure.

Give, or keep? Donate, or save?

What to make of all this? Charity in the UK — and in many other countries — is a huge affair. Few of us don’t give to charitable causes entirely. Put another way, only a small section of society take the view that charity begins at home, and stays there.

That’s probably a good thing. I’m not a huge giver to charity, but I like to play my part. And I feel good about it. And it needn’t be difficult — some credit cards make it easy, by automatically deducting small donations, or linking cashback to good causes.